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As part of the Texas Motor Vehicle Safety Responsibility Act which came into effect on Saturday, the cost for basic liability auto insurance will increase.
This new change is part of a two-step increase that was approved by Texas lawmakers in 2007.
Texas motorists at that time were required to carry $20,000 in bodily injury liability for one person hurt in an accident, $40,000 for two people or more hurt and $15,000 for property damage liability.
The first part of the gradual increase went into effect in April 2008, when the minimums were pushed up to 25/50/25 respectively.
The new law increases the minimum injury coverage to $30,000 and the accident total minimum to $60,000, but the property damage minimum remains the same at $25,000.
State Farm Insurance Public Affairs Officer Ryan Gauna said that their agents will guide impacted customers through the changes, but they don’t expect a drastic increase in premiums.
“As for how much more drivers can expect to pay, the cost will vary depending on the customer and their individual policy,” he said. “Not everyone will be impacted by the increased minimum limits, since many drivers already carry greater coverage than the law currently requires. We are advising all who carry auto insurance to contact their insurers to find out exactly how these changes may impact their own automobile policy premiums. State Farm will communicate the changes to its customers as their policies renew on or after Jan. 1. Customers can upgrade as their policy comes up for renewal.”
But there is a positive side. Randy Shaw, office manager for Allstate Insurance at 400 N. Ridgeway Drive in Cleburne, said that the state-mandated increased coverage also comes with increased protection for customers.
“It protects you as far as your liability limits are concerned. If you hit somebody and they ended up in the hospital and your limit is $25,000, you’re still liable for the rest,” Shaw said. “It you hit some of these higher-end vehicles that are on the road and you do $30,000 worth of damage, your insurance pays $25,000 and you’re liable for the other $5,000. You start losing your money.”
Texas law requires people who drive in Texas to be financially responsible for the accidents they cause.
Liability insurance pays to repair or replace the other driver’s vehicle and pays the medical expenses of the other party, according to the Texas Department of Insurance, but it does not pay to repair or replace the policyholder’s vehicle.
“In most cases, even the 30/60/25 [as the new law requires] is way too low to be quite honest,” he said. “People need to be at least at 50/100/50. We feel that would protect you sufficiently. Most of our customers have the additional coverage because that’s what we believe they need to have. We don’t feel like we’re doing our customers a favor if we’re giving them the minimum.”
The law affects basic liability policies only.
The Legislative Reference Library of Texas cited other state laws changes as of Jan. 1, as part of the 81st Legislature:
• House Bill 2347, relating to tuition and fee exemptions at public institutions of higher education for certain peace officers enrolled in criminal justice or law enforcement course work and for certain educational aides.
• House Bill 2774, relating to self-directed and semi-independent status of state financial regulatory agencies and the licensing and regulation of certain persons involved in residential mortgage lending; making an appropriation; providing a penalty.
• House Bill 4833, relating to the creation of district courts and statutory county courts and to the composition of juvenile boards in certain counties.
• Senate Bill 873, relating to a requirement that certain appraisal districts provide for electronic filing of and electronic communications regarding a protest of appraised value by the owner of a residence homestead.
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